CLEC Report ™ 2005, 19th Edition

The CLEC industry, seemingly moving toward stability at the end of 2003, has again entered a period of uncertainty and volatility. This report shows that the CLEC industry is still in a period of falling revenues and capital expenditures, consolidation, and bankruptcy. NPRG predicts that many current CLECs will not survive beyond the next two years and that the Companies that do survive will do so through product expansion and corporate consolidation.

FCC regulation is causing a great deal of uncertainty in the CLEC industry. CLECs that resell incumbent services will find it difficult to survive, much less prosper, if UNE-P regulation is overturned. Companies will be forced to enter Chapter 11 bankruptcy for a second or third time, a trend that has already begun to occur.

This edition of the CLEC Report™ focuses on 56 traditionally voice-focused, facilitiesbased CLECs, as well as another 13 that could attain facilities-based status in the next 24 months. Regarding revenues and other metrics, the CLEC Report 2005™, 19th Edition provides two sets of totals. The first is an aggregate number for the companies profiled in this report - the traditionally voice-focused CLECs. The second total adds in the aggregate number for all other facilities-based CLEC categories covered in other NPRG reports, which cover the entire competitive telecommunications industry. Thus, in addition to reporting on the companies in this Report, we are also reporting totals for the full range of industries that collectively constitute the facilities-based CLEC world.

As is the case across all NPRG industry analysis reports, the CLEC Report 2005™, 19th Edition is a compendium of company profiles, each built on a foundation of basic metrics captured through primary research, as well as on thorough reporting and analysis conducted throughout the year by NPRG analysts. All of the industry metrics in the CLEC Report™ are aggregates of these company metrics. Thus, NPRG’s sector and overall industry numbers are not extrapolations, but actual totals built from the ground up.